The United States Postal Service (USPS) was founded at the beginning of the American Revolution in 1775. It was never intended to be a profitable enterprise, but instead as a vital service for correspondence across America in a time without the Internet or telephones.
These days, we do have the Internet with its email and social networks, and practically everyone has a phone. “Snail mail,” as it’s often called, is no longer such a vital service. As a result, the USPS has been losing billions of dollars a year for many years now.
I don’t think the obvious solutions will fix the problem. The obvious solutions are:
- Raise prices. That will only further decrease their business. And if they raise prices too high, people will just switch to using UPS or FedEx all the time.
- Delivering mail fewer days per week. This would make the USPS slow and unreliable.
- Delivering to central locations instead of door to door. This may work in urban areas, but not in rural areas.
To solve the problems, we have to first find the root of the problems. The USPS loses money while UPS and FedEx make money not because the government is inefficient, but because the business model of the USPS no longer works.
UPS and FedEx create mail routes only when someone pays them to run the route. That is, you only get a visit from UPS or FedEx if somebody paid them to deliver something to you. You get a visit from the USPS almost every day regardless of whether someone paid them to visit you or not. The business model of the USPS is that they will pay someone to visit nearly every building in America six days a week. No wonder they’re losing money!
We can’t just have the USPS copy the business model of UPS and FedEx, because there wouldn’t be a point of having USPS around anymore then. It would make more sense just to dissolve the USPS and let UPS and FedEx, and perhaps other private companies handle all the mail. No, USPS can’t directly compete for the same services. Instead, I suggest USPS model after another essential service: garbage removal.
We pay private companies across the USA to regularly pick up trash from nearly every building in America and move it all to the local landfills. You might not think you pay for this service, because the fees are often included in community HOA fees. What if we thought of mail delivery as an essential service that each home or building owner pays for, like water, electricity, and trash removal?
If we thought of USPS more like an essential utility or essential trash removal services, USPS could rather easily operate within their budget every year. Every homeowner or building owner would pay a yearly mail service fee to maintain regular mail delivery to their address. If you don’t pay it, your home or building will not be included in the USPS mail route. And like HOA fees, the fees you pay to the USPS could go up with inflation or changes in economic factors (like gasoline).
We don’t need to privatize the USPS or raise the prices of stamps to make it all work. I think taking these steps would actually make things worse. Instead, we need a change in business models and the way we all think of our mail services.
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